HEALTH CARE ALERT: Final HHS Notice of Benefit and Payment Parameters for 2016

HEALTH CARE ALERT: Final HHS Notice of Benefit and Payment Parameters for 2016

CMS.GOVOn 2/20/15, Centers for Medicare & Medicaid Services (CMS) issued the Final HHS Notice of Benefit and Payment Parameters for 2016. The press release states, “This rule seeks to improve consumers’ experience in the Health Insurance Marketplace and to ensure their coverage options are affordable and accessible.  This rule builds on previously issued standards which seek to make high-quality health insurance available to all Americans.  The final notice further strengthens transparency, accountability, and the availability of information for consumers about their health plans.” (Source: CMS Press Release)

Open Enrollment Period

The rule finalizes the annual open enrollment period for 2016 to begin on November 1, 2015 and run through January 31, 2016, giving consumers three full months to shop.

Standards for Qualified Health Plans (QHP)

To further aid consumers in finding a health plan that best suits their needs, the rule clarifies standards for qualified health plan (QHP) issuers to publish up-to-date, accurate, and complete provider directories and formularies.  Issuers also must make this information available in standard, machine-readable formats.

Rate Setting Process

To enhance the transparency of the rate-setting process, the final rule includes provisions to facilitate public access to information about rate increases in the individual and small group markets for both QHPs and non-QHPs using a uniform timeline.  It also includes provisions to further protect consumers against unreasonable rate increases by ensuring more rates are subject to review.

Our partner Cigna states, “Premium rate increases in the individual and small group markets of 10 percent or more (or above a threshold specified by a state) triggered at the “plan-level” will be reviewed by state regulators or HHS to determine whether they are reasonable. This is a change from the previous requirement that was triggered at a “product level.”

Issuers seeking the increase are required to publicly disclose the proposed increases and the justification for them.  Beginning with rates filed in 2016 for coverage effective on or after January 1, 2017, rate increases will be subject to review by HHS.”

Additionally, this final notice provides detail on the following points (Source: CMS Fact Sheet and FAQs):

Eligibility, Enrollment, and Benefits

  • Annual Open Enrollment Period
  • Hardship Exemptions
  • Habilitative Services
  • Revised Essential Health Benefits Benchmark Selection
  • Pediatric Age
  • Prescription Drug Coverage
  • Formulary Drug List
  • Drug Exception Process
  • Drug Mail Order Opt Out
  • Benefits Discrimination
  • Determination of Minimum Value
  • Transparency in Coverage
  • Meaningful Access Standards
  • Network Adequacy (Provider Directories)
  • Essential Community Providers
  • Improving Consumer Access to Information
  • Quality Improvement Strategy (QIS)
  • Strengthening the MLR Program
  • SHOP

Payment Parameters

  • Promoting Stable Individual Market Premiums
  • 2016 User Fees
  • Premium Adjustment Percentage Index
  • Reduced Maximum Annual Limitation on Cost Sharing

Other Provisions

  • Risk Adjustment Model Recalibration
  • Defining Common Ownership or Control
  • Self-insured Expatriate Plans
  • Clarification on Risk Corridors
  • Allocation of Risk Corridors Collections for 2016
  • Non-Navigator Organizations: Physical Presence Requirement
  • Standards for HHS-Approved Vendors of FFM Training for Agents and Brokers
  • Good Faith Compliance Extension through 2015

Final CMS Fact Sheet and Press Release



Cigna Provides Concise Write-Up on Final Notice for 2016 Benefit and Payment Parameters

CignaOur partner Cigna has provided an excellent overview of, “the regulations address(ing) a variety of Patient Protection and Affordable Care Act (PPACA) benefit provisions for 2016 affecting both the group and individual markets. While HHS clarified a few items from the proposed rule – namely the open enrollment period, minimum value, and medical loss ratio – many of the provision requirements remain the same.”


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